social security, medicare and medicaid work for california 2012

7/31/2019 Social Security, Medicare and Medicaid Work for California 2012

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Social Security, Medicare and Medicaid Work for california

ACKNOWLEDGMENTSLike our Social Security, Medicare and Medicaid, this report is the product of the foresight and hard work of many people. Social SecurityWorks partnered closely with the Alliance for Retired Americans who are coordinating the release of this report in California.

We are grateful to the following people for writing, designing and producing this report: Daniel Marans, Policy Director of Social SecurityWorks (SSW), is the principal author and lead researcher, whose commitment to excellence, along with that of Alex Lawson, SSWsExecutive Director, drove the project to its successful conclusion. Michael Phelan, SSWs Deputy Director managed the actual productionof the report. We would like to thank Don Owens and Lacy Crawford, respectively, SSWs Communications Director and CommunicationsAssociate for assembling, sometimes writing and editing the personal stories included in all 50 state reports. Dana Bell and MollyChecksfield, SSWs Legislative and Policy Associates, played a crucial role in the reports completion, performing a significant amount ofthe initial research, drafting the appendices, and editing and verifying the data in the report. Tom Arnold-Forster, National Academy of SocialInsurance Summer Policy Fellow, proofread the data.

Very importantly, we want to acknowledge our appreciation to Carl Mariz for generously sharing his story and views about the importanceof Social Security in his life. We would also like to acknowledge the staff of the Kaiser Family Foundation for their assistance in finding andunderstanding the Medicare and Medicaid data in the report, especially Research Associates Lindsay Donaldson and Jessica Stephens.Graphic design was provided by Deepika Mehta.

This report also benefited from the work and commitment of several persons who assisted with a previous series of reports. Arloc Sherman,Senior Researcher, and Paul N. Van de Water, Senior Fellow, at the Center on Budget and Policy Priorities generously provided advice andaccess to poverty data analyzed by the Center. Alice Wade, Deputy Chief Actuary of the Social Security Administration, with the help ofVirginia Reno, Vice President for Income Security at the National Academy of Social Insurance, graciously provided data on the value ofSocial Securitys survivors and disability insurance. The Center for Economic and Policy Research provided the invaluable analysis andgraph showing the causes of the recent run-up in federal deficits.

The data presented in this report speaks volumes about the importance of Social Security to families, communities and state and localeconomies. We hope the report is useful to you as you work to strengthen Social Security in this 77th anniversary year. Please contact theSocial Security Works Communications Director, Don Owens, if you have questions about this report: [email protected].

Nancy Altman and Eric KingsonFounding Co-directors, Social Security WorksCo-chairs, Strengthen Social Security Coalition

The Alliance for Retired Americans is a grassroots organization representing more than 4 million retirees and seniorsnationwide. Headquartered in Washington, DC, the Alliances mission is to advance public policy that protects the

health and economic security of older Americans by teaching seniors how to make a difference through activism.Learn more about The Alliance and its work at www.retiredamericans.org

The mission of Social Security Works is to protect and improve the economic status of all Americas, especiallydisadvantaged and at-risk populations, and, in so doing, to promote social justice for current and future generationsof children as well as young, middle-aged and older adults. www.socialsecurity-works.org

The Strengthen Social Security Coalition is made up of more than 320 national organizations and many stateorganizations, representing more than 50 million Americans. The Coalition is united around core principles, whichinclude that Social Security benefits should not be cut and, instead, should be increased for those who are mostdisadvantaged, and the belief that our nations Social Security, Medicare and Medicaid systems are fundamental tothe well-being of Americas families and to the type of nation we are. www.strengthensocialsecurity.org

Our Social Security, Medicare and Medicaid Work for Americaseries of 50 state reports includes much information that public officials, members

of the press, and advocates will find useful. In addition to providing information about the programs history, character and vitality, as well as

compelling, real-life stories, each report includes statistics about the number of people who receive benefits, the types of benefits they receive

and the total amount of funds flowing from these programs into every state, its congressional districts and counties.

Please note that a one-page fact sheet summarizing the data in this report can be found at the end of the report, directly following the endnotes.

For congressional district-level Social Security data, please see Appendix 1: Social Security Works for Californias Congressional Districts, toward

the back of the report, just before the end notes.

For county-level Social Security, Medicare, Medicaid and demographic data, please see Appendix 2: Social Security, Medicare, and Medicaid Data

for Californias Counties, toward the back of the report, just before the end notes.
http://socialsecurity-works.org/http://www.retiredamericans.org/http://www.socialsecurity-works.org/http://www.strengthensocialsecurity.org/http://www.strengthensocialsecurity.org/http://www.socialsecurity-works.org/http://www.retiredamericans.org/http://socialsecurity-works.org/


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Social Security, Medicare and Medicaid Work for california 1

In 1935, when President Franklin D. Roosevelt

signed the Social Security Act into law he called

it a cornerstone, the foundation of a structure tobe maintained and built upon by and for future

generations. Social Security could not protect all

Americans against every risk, but, as the President

said, it could lessen the consequences of lost

earnings in old age for workers and their families.

Since then, we have built our Social Security

structure carefully and deliberately. In 1939, we

added Survivors Insurance benefits for widows

and dependent children, eventually extending it

to widowers as well. Disability Insurance benefits

were added in 1956, followed by Medicare and

Medicaid in 1965. The automatic cost-of-living

adjustment (COLA) was added in 1972, designed

to maintain the purchasing power of benefits

no matter how long someone lives. We built,

maintained and strengthened these institutions for

a reason: to enable working men and women to

protect themselves and their families. We built thembecause we, as a nation, value hard work, personal

responsibility, and human dignity; we care for our

parents, our children, our spouses, our neighbors

and ourselves.

This report reveals the success of these institutions

for California and the nation. The numbers tell part

of the story: how many people receive benefits

in California, in its congressional districts and

its counties; how many dollars flow into these

jurisdictions in a year; the types of benefits and the

types of people who receive benefits. Perhaps more

importantly, the report presents the stories of hard-

working Californians and their families whose lives

are immeasurably better because of the protections

they have earned.

du d SuMMy

FIGRE 11

Socia Secrit, Meicare an Meicais mpact on the conom an Popation o aiornia

PROGRAMBENEFICIARIES IN

CALIFORNIAPERCENT OF RESIDENTS

RECEIVING BENEFITSAVERAGE BENEFIT TOTAL ANNAL BENEFITS2

Social Security 4,979,141 13.4 percent $12,930 $64.4 billion

Medicare 4,555,296 12.2 percent $11,109 $50.6 billion

Medicaid 11,027,600 29.8 percent $3,780 $41.7 billion

Sources: Social Security Administration, 2011; .S. Census Bureau; Kaiser Family Foundation, 2011; Economic Policy Institute, 2011.

We can never insure one-hundred percent of the population against one-hundred percent of the hazards

and vicissitudes of life. But we have tried to frame a law which will give some measure of protection to theaverage citizen and to his family against the loss of a job and against poverty-ridden old age. This law, too,represents a cornerstone in a structure which is being built but is by no means complete. It is a structureintended to lessen the force of possible future depressions. It will act as a protection to future Administrationsagainst the necessity of going deeply into debt to furnish relief to the needy. The law will flatten out the peaksand valleys of deflation and of inflation. It is, in short, a law that will take care of human needs and at thesame time provide for the nited States an economic structure of vastly greater soundness.

Franklin D. Roosevelt, August 14, 1935


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As you read through this report, think of the people

you know. Family members who live in dignity in old

age because they can count on a monthly Social

Security check that they or another family member

have earned. Think of that older person who has

Medicare, and with it the peace of mind that he or

she can receive medical care without becoming

bankrupt. Think of a family you know who is able

to care for a functionally disabled child at home

because Medicaid is there. Think of a grandparent, a

parent, an older aunt, uncle, cousin or family friend,

whose life savings may have been lost paying for

nursing home care, but who is still able to receive

that care because of Medicaid.

Think, too, of how these institutions, like the nations

highway system, are part of a rich legacy by those

who came before, a legacy that keeps workingin good times and bad. Throughout the past few

difficult years, Social Security, Medicare, and

Medicaid have been even more vital than before for

California residents, and the lifeblood of many small

businesses, hospitals and nursing homes and home

caregivers. Virtually all of the jobs our Social Security,

Medicare, and Medicaid systems support stay in

America.

As important as these programs protections are

today, the need for Social Security, Medicare and

Medicaid programs will only increase in coming

years. The population of persons aged 65 and

over is growing. Income growth is slow for most of

todays workers. Jobs are less secure, and many

workers have sustained substantial losses of home

equity and other savings. Furthermore, employers,

who historically have offered supplements to Social

Security, are increasingly terminating traditional

pension plans and either not replacing them, or

replacing them with far more risky and inadequate

401(k) savings accounts.

Cutting these programs would threaten our families

economic security and health and deepen our jobs

crisis. Indeed, the nation should be thinking about

expanding, not cutting, these programs and the

protections they provide. They, like our highways,

are so fundamental to our family and community life,

and, in an increasingly uncertain environment, evermore important to middle-aged and young workers

and those who will follow. We are much wealthier as

a nation than we were in 1935, 1939, 1956, 1965,

or 1972, when these structures were begun and

improved. Now it is our turn to maintain and build

upon that structure, as those who came before have

done. It is our turn to preserve and improve these

valuable systems for ourselves and for those who

follow. It is our turn to build a legacy for our nations

children and grandchildren so when they become

workers, they will have the economic security that

Social Security, Medicare, and Medicaid provide.


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We built our Social Security system because it is

the most efficient, secure, universal and fair way for

Americans to replace wages in the event of death,

disability, or old age. For over 75 years, even as our

nation has endured wars, political crises and severe

economic recessions, Social Security has never

missed a payment; it has paid every dollar of earned

benefits, on time and in full.

In the wake of the greatest financial crisis since the

Great Depression, the risks of investing money on

Wall Street or in real estate have never been clearer.

Since 2008, millions of Americans have seen theirsavings wiped out, as the value of 401(k)s and home

equity have plummeted. Meanwhile, Social Security

continues to prove reliable.

That is why our Social Security system is now more

important than ever. In a world of risky investment

schemes and unpredictable markets, Social Security

is a fortress of security and reliability. In this uncertain

world, where no one is invulnerable to the tragedy

of premature death or serious and permanent

disability, Social Security is there to cushion the

economic blow of such tragedies. Today, 56 million

Americans receive benefits each monthretired and

disabled workers, their families, and surviving family

members.3 Its benefits to California residents, and all

Americans, are very modest, but vital; the average

national benefit was $12,982 a year in 2010.4 These

benefits are the building block of retirement income

security for middle class Americans. In 2010 two

out of three households aged 65 and over relied

on Social Security for half or more of their income,and over 1 out of 3 relied on Social Security for

90 percent or more of their income.5 The program

lifted 20 million Americans out of poverty in 2008,

including one million children.6

Social Security can pay all benefits in full and on

time for the next twenty years. After that, if Congress

were not to act, it could still pay more than 75 cents

on every dollar of earned benefits.7 The shortfall is

equivalent to 1 percent of Gross Domestic Product

(GDP),which is roughly the amount of revenues that

would be lost to the federal budget from extending

the George W. Bush-era tax cuts benefitting the

richest 2 percent of American households those

with taxable income above $250,000 a year.8

All we need to maintain our Social Security system

is a simple adjustment: have everyone, including

millionaires and billionaires, pay the same rate

as ordinary Americans. While the vast majority of

Americans must make payroll tax contributions onall of their wages, millionaires and billionaires only do

so on the first $110,100 of their earnings this year.

Asking all Americans to pay the same rate would

come very close to closing Social Securitys entire

projected 75-year funding gap.

While the federal budget has run a deficit in every

year but five over the last half century, Social

Security is not allowed to pay benefits unless it has

the funds to cover every penny of the cost, and is

not allowed to borrow any shortfall.9 That means that

Social Security does not, and, by law, cannot add a

penny to the federal deficit or debt (which is simply

the accumulation of annual deficits).10 Maintaining

our Social Security system has nothing to do with

reducing the federal budget deficit, and therefore

should be off the table in deficit talks. It should not

be part of any deficit reduction legislation considered

by our nations leaders.

Social Security Works for CaliforniasResidents and Economy

Social Security provided benefits to 4,979,141

people in 2010, 1 out of 8 residents (13.4 percent).11

California residents received Social Security

benefits totaling $64.4 billion in 2010, an amount

equivalent to 3.4 percent of the states annual

GDP (the total value of all goods and services

produced).12

Sl Suy WkS


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FIGRE 3

aiornias Socia Secrit Beneiciaries,2010

Source: Social Security Administration, 2012

66%

Retired Workers7%

Children

13%DisabledWorkers

8%Widow(er)s

5% Spouses

The average Social Security benefit in 2010 was

$12,930.13

Social Security lifted 1,653,000 California

residents out of poverty in 2008.14

Social Security Works for Californias

Seniors15


retired workers in 2010, two-thirds (66.3 percent)

of beneficiaries.16 [Figure 3]

The typical benefit received by a retired worker in

California was $13,804 in 2010.17

Social Security provided benefits to 382,138

widow(er)s in 2010, 1 out of 13 (7.7 percent) of all

beneficiaries.18 [Figure 3]

Social Security lifted out of poverty 1,148,000

California residents aged 65 and older in 2008.19

Without Social Security, the elderly poverty rate

in California would have increased from 1 out of

13 (8.1 percent) to 4 out of 10 (37.4 percent).20

[Figure 2]


Women


California women in 2010, 1 out of 7 women(13.5 percent).21


spouses in 2010, 1 out of 20 (5.4 percent) of all

beneficiaries.22 [Figure 3]

Social Security lifted out of poverty 708,000

California women aged 65 and older in 2008.23

Without Social Security, the poverty rate of elderly

women would have increased from 1 out of 10

(9.5 percent) to more than 4 out of 10

(40.9 percent).24 [Figure 2]


Workers with Disabilities25

Social Security provided disability benefits for

662,232 workers in 2010, 1 out of 7 (13.3 percent)

of all beneficiaries.26 [Figure 3]

The typical benefit received by a disabled worker

beneficiary in California was $12,576 in 2010.27

FIGRE 2

Povert ate or Beneiciaries65 an er With an WithotSocia Secrit, 20062008

Source: Center on Budget & Policy Priorities

65+ Women 65+

nPoverty rate without Social Security

nPoverty rate with Social Security

37.4%

40.9%

8.1% 9.5%


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Children28

Social Security is the major life and disability

insurance protection for more than 95 percent of

Californias 9,295,040 children.29


children in 2010,30 and it is the most important

source of income for the 1,221,251 children living

in Californias grandfamilies, which are households

headed by a grandparent or other relative.31


African Americans

In California, Social Security provided benefits

to 347,613 African Americans in 2009, 1 out of 8

(13.5 percent) of all African American residents.32

Nationwide, Social Security provided nearly

three-quarters (73.7 percent) of the income ofAfrican American elderly couples and unmarried

individuals receiving benefits, on average, in 2010.

Social Security was 90 percent of the total income

for half (49.4 percent) of these African American

elderly households.33

Nationwide, 3 out of 10 (32.1 percent) of all

African American beneficiaries received disability

benefits in 2009; for white beneficiaries it was

about half of that number (15.9 percent).34


Latinos


to 1 out of 6 (15.9 percent) Latino households in

2010, 531,551 households.35

Nationwide, Social Security provided more than

three-quarters (77 percent) of the total income of

Latino elderly couples and unmarried individuals

receiving benefits, on average, in 2010. Social

Security was 90 percent of the income for more

than half (55.1 percent) of these Latino elderlyhouseholds.36

The Social Security Administration estimates thatLatinos receive a higher rate of return on their

Social Security contributions than the overall

populationthe highest of any group. Thats

because they tend to have lower lifetime income,

longer life expectancies, higher incidence of

disability and larger families.37

CARL MARIZ

75 years old

Irvine, California

Back in the 1930s Carl Marizs grandparents,financially devastated by the Great

Depression, were among the first Americans

to receive Social Security. His grandfather

was a poor coal-miner that lost his job, but

along with his grandmother, they were able

to keep going and live with dignity because

they received Social Security payments. It

was a very small amount of money each

month, even for living in a small town outside

of St. Louis, but it meant that they could

survive with dignity. Carls Dad and Aunt werealso struggling financially in those times, so

there was almost nowhere else to turn.

Decades later, Carl worked hard as an

engineer and diligently invested in his

401(k) to ensure a secure retirement. While

he always planned to have most of his

retirement income come from his 401(k)

investments, they took a significant hit in

the last few years, due to the volatility of the

stock market.

Carl brightens up when he says, Whereas

with Social Security, its there! He

appreciates Social Securitys conservative

financial management that protects him from

market fluctuations. Carl also appreciates

not having to pay someone a lot of money

to manage those funds, or the risk of

being taken advantage of by scammers

something he certainly sees happening witholder peoples retirement finances.

Carl wants his children and grandchildren

to enjoy the peace of mind and ability to live

with dignity that Social Security has given

him and his grandparents.


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American Indians and Alaska Natives


to 1 out of 4 (25 percent) American Indian and

Alaska Native households in 2010, 52,505

households.38

Nationwide, Social Security provided 90 percent

of the income for 15 percent of elderly American

Indian and Alaska Native married couples, and 57

percent of elderly unmarried persons in 2010.39

Since Social Security has a higher income

replacement rate for workers with lower earnings,

Social Security replaces more of American Indians

and Alaska Natives pre-retirement earnings

than the overall population. The median earnings

of workingage American Indians and Alaska

Natives are about $34,000, compared to $41,500

for all working-age people. Social Securityprovides average benefits of about $13,206 and

$11,265 annually for American Indian and Alaska

Native men and women aged 65 and older,

respectively.40


Asian Americans, Native Hawaiians and

Pacific Islanders

In California, Social Security provided benefits to

1 out of 5 (19.1 percent) Asian American, Native

Hawaiian and Pacific Islander households in 2010,

308,747 households.

41

Nationwide, Social Security provided twothirds

(68.9 percent) of the total income for Asian

American households with beneficiaries aged 65

and older, on average, in 2010. Social Security

was 90 percent of the income for 4 out of 10

(41.7 percent) of these Asian American elderly

households.42

Nationwide, Asian Americans and Pacific

Islanders receive a high rate of return from Social

Security because of their long life expectancies.

An Asian American or Pacific Islander managed 65 in 2010, can expect to live until age

85, compared to age 82 for all men. An Asian

American or Pacific Islander woman of the same

age can expect to live until age 88, compared to

age 85 for all women.43


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Rural Communities44

Social Security is more important to rural

Californians than to other Californians. Nearly 1

out of 4 (22.7 percent) rural Californians received

Social Security compared with 1 out of 7 (13.7

percent) non-rural Californians in 2010.45

Social Security is more important to the local

economies of Californias rural counties than to

its non-rural counties. Total personal income in

Californias 21 rural counties was $29.1 billion

in 2010 of which $2.4 billion, or 8.3 percent,

was from Social Security. By comparison, total

personal income in the states 37 non-rural

counties was $1.6 trillion, of which $62 billion, or

4 percent, was from Social Security.46

Social Security Works for CaliforniasWorking Families

Through their hard work and payroll tax

contributions, nearly all California workers

earn Social Securitys retirement, disability and

survivorship protections for themselves and their

families.

Social Security is the most valuable disability

and life insurance protection for most California

workers. Nationwide, an estimated 3 out of

10 workingaged men and 1 out of 4 working

aged women will become severely disabled

before reaching retirement age. An estimated

1 out of 11 workingaged men and 1 out of 20

workingaged women will die before reaching

retirement age.47

A 30-year-old worker who earns about $30,000

and who has a spouse and two young children,

receives Social Security insurance protection

equivalent to private disability and life insurance

policies worth $465,000 and $476,000,

respectively.48

Social Security is a commitment made to all

Americans that has withstood the test of time. Itrepresents the best of American values rewarding

hard work, honoring our parents, caring for our

neighbors, and taking responsibility for ourselves

and our families. Social Security is based on a

promise that if you pay in, then you earn the right to

guaranteed benefits.


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We built our Medicare system because it is by far the

best way to provide Americas seniors and people

with disabilities with affordable health care they can

count on. For nearly half a century, Medicare has

given seniors and people with disabilities access to

critical health care. It protects beneficiaries and their

families against health-related expenditures that

might otherwise overwhelm their financesor worse,

force them to forego medical treatment needed to

survive.

Private health insurance companies, which must

generate returns for their shareholders, were notand are notwilling or able to insure seniors and

people with disabilities at affordable rates. That is

because seniors and people with disabilities have

greater medical needs and thus are more costly than

the young and healthy. Prior to Medicare, only about

half of seniors had health insurance. Those who were

insured paid nearly three times as much as younger

people, even though they had, on average, only half

as much income.49

Without Medicare, many people would not be able to

afford basic medical services. Medicare beneficiaries

are mainly people of modest means. Half had

incomes below $22,000 a year in 2010.50 Already

more than one-quarter of many beneficiaries Social

Security benefit is eaten up by out-of-pocket health

care costs.51

Medicare worksfor seniors and people with

disabilities, as well as people with end-stage renal

disease (ESRD) and Amyotrophic Lateral Sclerosis

(ALS, or Lou Gehrigs disease). The program

provides significant hospital, physician, medical

testing, pharmaceutical, rehabilitation, medical

equipment and other important services to seniors,

people with disabilities and people with ESRD and

ALS.52 Medicare provided health care coverage to48.7 million Americans in 2011, of whom over 8 out

of 10 (40.4 million) were aged 65 or older; and 1 out

of 6 (8.3 million) were severely disabled workers.53

The average benefit per Medicare beneficiary in 2011

was $12,042.54

Medicare consists of four parts, each of which

provides different medical benefits. Medicare Part A,

the Hospital Insurance (HI) program, covers in-patient

hospital as well as select kinds of skilled nursing

facility services, home health and hospice care. HI

is earned during ones working years, and paid for

by insurance contributions of 2.9 percent of wages,

divided equally between employers and employees.55*

Medicare Part B, the Supplemental Medical

Insurance (SMI) program, helps pay for physician

and preventive care services. SMI is a voluntary

program, funded by premiums, generally deducted

from beneficiaries Social Security checks, and from

general revenue.56

(Medicaid covers the premium

Md WkS

* Starting in 2013, the Affordable Care Act levies an additional 0.9percentage point Hospital Insurance tax on earned income for householdswith incomes exceeding $200,000 for singles and $250,000 for marriedcouples filing jointly. In addition, it would add a 3.8 percent nearnedIncome Medicare Contribution for such high-income households tounearned income including interest, dividends, annuities, royalties andrents (excluding income from active participation in S corporations).White House, Title IX. Revenue Provisions, Health Reform Details, 2012.http://www.whitehouse.gov/health-care-meeting/proposal/titleix/

targeted-healthcare-tax
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and out-of-pocket costs for those low-income

beneficiaries who are enrolled in Medicaid.)

Medicare Part C, also known as the Medicare

Advantage program, allows beneficiaries to enroll

in a private insurance plan, in lieu of Medicare Parts

A and B. These private plans receive payments

from Medicare to cover physician and hospital

service, and in most cases, prescription drug

benefits. Medicare Advantage Plans cost more for

the same services as provided under Parts A and

B.57 According to the White House, Medicare pays

Medicare Advantage insurance companies over

$1,000 more per person on average than traditional

Medicare.58 These extra costs result not only in

higher government outlays but also higher Part B

premiums for those enrolled in traditional Medicare.

The Patient Protection and Affordable Care Act (ACA)of 2010 includes provisions which seek to make the

costs of Part C closer to those of Part A and Part

B.59 About 11.5 million Medicare beneficiaries were

enrolled in Medicare Advantage as of April 2010

one-quarter (24.5 percent) of all beneficiaries.60

Medicare Part D, the prescription drug benefit,

covers most outpatient prescription drugs. Part D

benefits are provided by private plans that contract

with Medicare and are purchased voluntarily by

Medicare beneficiaries. They exist independently,

or as part of a Medicare Advantage plan. Part D is

funded by beneficiary premiums, generally deducted

from beneficiaries Social Security checks, and from

general revenue. In addition, states are required to

pay premiums for low-income beneficiaries who are

enrolled in Part D programs. 27.6 million beneficiaries

were enrolled in a Part D plan in 20104 out of 10

(41.7 percent) of all beneficiaries.61*

As health care costs skyrocket, our Medicare system

is more critical than ever. Medicare does a better

job of controlling health care costs than private

health insurance plans. While Medicares costs

per person increased by about 4.7 percent a year

from 1999 to 2009, the costs of similar benefitsunder private insurance rose 6.9 percentnearly

50 percent more.62 [Figure 4] Medicares superior

cost-control record is no coincidence; it is a function

of Medicares concentrated purchasing power. As

Professor Jacob Hacker of Yale niversity notes,

Medicare is capable of using its concentrated

purchasing power to pioneer new payment methods

that bring down costs. Hacker cites Medicares

implementation of a prospective payment system

and a resource-based physician fee schedule in

1983, and volume controls on Medicare physician

spending in the 1990s, as examples of Medicares

success in pioneering payment methods that

reduced underlying health care costs.63

Even though the traditional Medicare program, Parts

A and B, covers people who, on average, have more

health care claims and more expensive medical

conditions than private insurance, its administrative

costs are lower than those of private health

insurance plans. Medicares administrative costswere less than 2 percent of its total expenditures

in 2011.64 Private health insurances administrative

FIGRE 4

verage nna ncrease in Speningon ommon Beneits,* 19992009

Source: Center for Medicare & Medicaid Services, 2010

Medicare Private Health Insurance

4.7%

6.9%

*Common benefits refers to benefits commonly covered by

Medicare and private health insurance.

*As of January 1, 2011, the Affordable Care Act ensures that seniors whoreach the prescription drug coverage gap, known commonly as the donuthole, will receive discounts on brand-name and generic prescription drugscovered by Medicare Part D that increase gradually until the coverage gapis completely closed in 2020. Medicare.gov, Closing the Coverage GapMedicare Prescription Drugs Are Becoming More Affordable, January2012. http://www.medicare.gov/publications/pubs/pdf/11493.pdf
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costs, which include additional costs such as

advertising, retained profit to insurers and taxes

paid by insurers, are generally much higher. The

Congressional Budget Office (CBO) estimated that

in 2007 these administrative costs varied from about

7 percent for large employer plans with 1,000 or

more covered employees to as much as 30 percent

for insurance sponsored by very small firms or

purchased by individuals.65 CBO estimated that

while Medicare paid about $150 per person enrolled,

large employer plans paid about $300 per person

enrolled, and small employers and individuals paid

roughly $1,000 per person enrolled, on average.66

The traditional Medicare Program, Parts A & B, is

also administered more efficiently than Medicare

Advantage, Part C, which is provided by private

insurers who contract with Medicare. An analysis by

CBO shows that administrative costs accounted forless than 2 percent of expenditures in the traditional

Medicare program, compared to 11 percent in the

Medicare Advantage program in 2005.67

Maintaining our Medicare system is simple. As health

care costs increase system-wide, Medicares costs

rise as well. It is primarily as a result of system-wide

cost increases, that Medicare has significant long-

term funding challenges. The solution is to slow

the growth of health care costs for everyone, as

other developed countries have donenot to cut

Medicares benefits. Cutting Medicares benefits

simply shifts costs to the sickest and oldest among

us, forcing some seniors and people with disabilities

to forego treatment, living shorter, less healthyand

more medically costlylives as a result.

Medicare Works for Californias Economy

Medicare provided $50.6 billion in benefits in

200922 percent of all health care spending in

the state.68 The average expenditure per Medicarebeneficiary was $11,109.69

Medicare Works for California Residents

Medicare insured 4,555,296 Californians in

20091 out of 8 (12.3 percent) state residents.70

Medicare Works for Californias Seniors

3,943,424 of Californias 4,555,296 Medicare

beneficiaries were aged 65 or older in 2009

nearly 9 out of 10 (86.6 percent) beneficiaries.71

Medicare Works for Californias People

with Disabilities

644,608 of Californias 4,555,296 Medicare

beneficiaries were people with disabilities in

20091 out of 7 (14.2 percent) beneficiaries.72

Medicare Works for Californias Residents

with End-Stage-Renal Disease (ESRD)

End-stage-renal disease (ESRD) occurs whena persons kidneys stop functioning at a level

needed for everyday life. People suffering from

ESRD generally must undergo dialysis treatment

or receive a kidney transplant, which are both

prohibitively expensive.73

Medicare Works for Californias Residents

with Amyotrophic Lateral Sclerosis (ALS)

Amyotrophic Lateral Sclerosis, more commonly

known as ALS, or Lou Gehrigs disease, is a

nervous system disease that gradually shuts

down all muscles in a persons body, eventually

resulting in death from respiratory failure.74 Many

California residents with ALS would impoverish

themselves or their families without the help of

Medicare.

Seniors and people with disabilities cannot be

economically secure if they are one illness away from

bankruptcy. Medicare should be strengthened, not

cut. As private sector health insurance continues torise in cost, Medicare is more important than ever.


13/25


We built our Medicaid system to provide health care

for low-income families, children, seniors and people

with disabilities. For nearly half a century, Medicaid

has provided critical health coverage for low-income

Americans. While Medicaid originally only insured

Americans receiving cash welfare assistance,

Congress expanded it over the years to help insure

those left behind by the private insurance system.* It

is a lifeline for those who have nowhere else to go.75

Medicaid insured 62.6 million Americans in 2009.76

Like Medicare, it is an important source of funding

for rural hospitals and inner-city health care facilities.

Medicaid is essential because private health

insurance is unaffordable for millions of Americans.

Private health insurance costs have risen dramatically

in recent years. Average annual premiums for a

family with employer-sponsored health insurance

rose to $15,073 in 2011a 9 percent increase from

the previous year.77

Medicaid is especially crucial to people in need of

community- and institutionally-based long-term care

services. Medicare does not cover most long-term

care costs, and private insurance plans that cover

long-term care are often prohibitively expensive. As

a result, many individuals exhaust their assets under

the weight of steep long-term care costs, and have

nowhere to turn but Medicaid. In short order, long-

term care patients and their families can go from the

middle class to a life of poverty in which they need

assistance.

Two-thirds of all Medicaid spending is for seniorsand people with disabilities.78 One out of every four

seniors and people with disabilities depended on

Medicaid in 201016 million people. That includes

15.4 percent of all seniors (6.3 million) and 44.6

percent of people with disabilities (9.8 million).79

Medicaid is also crucially important to children, who

are about half of its beneficiaries nationwide.80 More

than one in four of the nations children receive their

health insurance through Medicaid.81

Maintaining our Medicaid system, like our Medicare

system, is simple. As health care costs increase

system-wide, Medicaids costs rise as well. It is

primarily as a result of system-wide cost increases

that Medicaid has significant long-term funding

challenges. The solution is to slow the growth of

health care costs for everyone, as other developed

countries have donenot to cut Medicaids benefits.

Cuts in federal funding to Medicaid will shift costs to

states, if they have the funds to pick up the shortfall,or worse, to individuals and families who can least

Mdd WkS

*The Affordable Care Acts expansion of Medicaid and Childrens HealthInsurance Program (CHIP) eligibility alone is projected to result in theenrollment of an additional 32 million Americans in Medicaid and CHIPby 2022. Congressional Budget Office, Table 3. March 2012 Estimateof the Effects of the Affordable Care Act on Health Insurance Coverage,Updated Estimates for the Insurance Coverage Provisions of the

Affordable Care Act, March 2012. http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf
http://-/?-http://-/?-http://-/?-http://-/?-


14/25


afford it. More troubling still, it may make life-saving

medical care inaccessible for those who need it.

Medicaid Works for Californias Economy

Medicaid provided $41.7 billion in benefits in

200918.1 percent of all health care spending in

the state.82 The average expenditure per Medicaid

beneficiary was $3,780.83

Medicaid Works for California Residents

Medicaid insured 11,027,600 Californians in

20093 out of 10 (29.6 percent) state residents.84

Medicaid Works for Californias Children

Medicaid insured 4,429,491 children in 2009

nearly half (47 percent) children in the state.85

Medicaid Works for Californias Seniors 998,482 of Californias 11,027,600 Medicaid

beneficiaries were aged 65 or older in 2009


Medicaid Works for Californias People

with Disabilities

1,015,376 of Californias 11,027,600 Medicaid

beneficiaries were people with disabilities in


Medicaid Works for Californias Long-Term

Care Residents

Medicaid provided $13.8 billion in long-term care

benefits for California residents in 2009. That

includes:

o $7.4 billion in home health care services

(54.2 percent)

o $4.1 billion to nursing home facilities

(29.8 percent)

o $13.4 billion to mental health facilities

(9.7 percent)

o $864 million to intermediate care facilities for

the intellectually disabled (6.3 percent).88

Medicaid insured the vast majority of California

residents who opt for nursing home care. 68,440

of Californias 102,560 nursing home residents

were Medicaid beneficiaries in 20102 out of 3

(66.7 percent) residents.89 The average annual

cost of nursing home care for a semiprivate room

in California was $82,900 in 2010.90 Given the

high cost of nursing home care, many California

residents would not be able to afford it without

Medicaid.

Medicaid Works for California During

Economic Recessions

Because Medicaid eligibility is contingent uponhaving low income, the program expands to

accommodate those who have lost jobs or earnings

during a recession. Nationwide, between June 2008

and June 2009, the height of the Great Recession,

monthly Medicaid enrollment rose by 3.3 million. That

amounts to a 79 percent increase from the average

annual enrollment rate between 2000 and 2007.

While there are several factors that fuel Medicaid

enrollment, experts believe that job losses and

resulting losses of employer-based insurance and

declining income, cause more people to qualify for

Medicaid.91

As financially strapped states cut Medicaid, the last

thing the nations seniors, people with disabilities,

and low-income children need is for the federal

government to cut the program at the national level.

Like Social Security and Medicare, this vital program

should be strengthened, not cut.


15/25


The large run-up in federal deficits in recent years

resulted primarily from huge tax cuts in 2001

and 2003; the unpaid costs of the Iraq andAfghanistan wars; the Great Recession, which

dramatically reduced tax collections and increased

unemployment compensation and other spending;

the economic stimulus and recovery spending; and

the Wall Street bank bailout.92 [Figure 5] By law,

Social Security can only pay benefits if it has the

income to cover its costs. Its income is primarily the

result of insurance contributions paid by hardworking

Americans and their employers. It does not have

borrowing authority which is why it never has and

never will contribute to federal budget deficits.

Likewise, large anticipated yearly increases in health

care expenditures, public and private, reflect long-

term structural problems in the nations health care

system. Compared to other industrial democracies,

the nited States expends roughly twice as much

per person on health care generally without providingcoverage for all our citizens. While the nations recent

health care reform is expected to bend the cost curve

and to expand coverage, health care expenditures are

still expected to rise for many years, well in excess of

inflation. Thats bad for consumers, employers and

the economy, but it is not the fault of Medicare and

Medicaid. In fact, Medicare is the most efficient part

of the health care system, averaging just 2 percent

in administrative costs compared to about 7 percent

for large group plans and as much as 30 percent for

plans purchased by individuals.93

To reduce the federal debt, Congress should be

looking at its causes. It should not cut Social Security,

Medicare, and Medicaid, which were built to protect

working persons and their families against lost wages

and the high cost of health care, and which are so vital

to the economic security of our nation.

Social Security, Medicare and Medicaid represent

the best of Americas values, including caring foraging parents and neighbors, reward for hard work,

personal responsibility and dignity. In California, these

programs spend about $156.7 billion a year, providing

benefits to an average of 1 out of 5 residents for

each program.94 It is no surprise that poll after poll

shows that Americans overwhelmingly support these

programs and do not want to see them cut. Cutting

them would weaken the economic security of all

Americans. While that would be bad policy anytime,

it would be disastrous in this time of widespread

economic loss.

The old, the disabled and todays workers have a

stake in preserving these foundational systems

for themselves, their families, their children and

grandchildren. And politicians have the opportunity

to maintain and improve these paramount

achievements for future generations, just as previous

Congresses and presidents have done for us.

luS

FIGRE 5

ases o ecent n-upin feera deicits

Source: Center for Economic and Policy Research, 2012

nWars in Iraq and Afghanistan

nBush-era tax cuts

nRecocvery measures

nTARP, Fannie and Freddie

nEconomic downturn

Billionsofdollars

1600

1400

1200

1000

800

600

400

200

0

-200

-400

2001 2003 2005 2007 2009 2011

ACTAL DEFICITS

DEFICITS WITHOT THESE FACTORS


16/25


pp

enix1:SocialSecurityWorksforaliforniasongressionaldistricts(Page1/3)

State

total

CongreSSionalDiSt

riCtS

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

Totalannual

benets

($in

millions)*

$64,2

82M

$1,6

05M

$1

,799M

$1,6

54M

$2,1

11M

$1,1

12M

$1,6

33M

$1,1

90M

$1,1

13M

$1,0

65M

$1,5

10M

$1,5

05M

$1,4

09M

$1,0

94M

$1,2

50M

$1,1

38M

$936M

$1,1

40M

$1,0

87M

Numberof

residents

instate/

congressional

district

37,2

53,9

56

704,0

12

708,5

96

783,3

17

774,2

61

700,4

43

664,468

655,7

08

666,8

27

648,7

66

714,7

50

796,7

53

651,3

22

665,3

18

653,9

35

677,6

05

676,8

80

664,2

40

723,6

07

Numberof

residents

receiving

Social

Securit

benets

4,9

79,1

41

126,7

48

147,5

08

124,5

99

157,8

45

93,5

75

114,5

98

91,5

47

89,3

30

81,2

21

106,8

17

108,6

08

98,9

36

82,8

26

81,4

96

80,7

26

71,3

15

90,8

60

96,0

66

Percentof

residents

receiving

Social

Securit

benets

13.4

%

18.0

%

2

0.8

%

15.9

%

20.4

%

13.4

%

17.2

%

14.0

%

13.4

%

12.5

%

14.9

%

13.6

%

15.2

%

12.4

%

12.5

%

11.9

%

10.5

%

13.7

%

13.3

%

Women

2,5

20,5

06

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Retired

workers

3,3

01,0

43

80,3

53

9

0,2

92

81,9

90

108,6

70

53,7

63

81,4

41

57,5

82

61,0

16

53,5

16

72,4

15

73,2

25

73,5

02

54,1

36

60,1

49

56,5

23

47,2

14

60,0

33

54,6

97

Disabled

workers

662,2

32

21,5

55

2

7,1

23

18,1

98

21,9

41

19,5

00

13,0

75

15,7

63

14,7

44

12,8

79

12,8

93

13,8

89

9,1

08

11,7

12

6,7

14

8

,453

9,9

49

12,3

35

18,7

24

Widow(er)s

382,1

38

9,8

02

1

1,5

04

9,3

43

10,8

30

7,0

53

8,6

63

6,6

55

5,3

49

5,7

56

8,5

75

7,9

77

7,0

60

6,0

92

5,8

52

5

,750

4,8

29

7,1

28

7,8

42

Spouses

269,3

63

5,6

00

6,9

91

5,4

82

6,9

42

3,5

34

5,2

30

3,8

81

3,8

03

3,3

95

5,9

46

5,3

11

4,9

18

4,3

74

5,2

49

4

,672

4,2

65

4,8

87

4,7

01

Children

364,3

65

9,4

38

1

1,5

98

9,5

86

9,4

62

9,7

25

6,1

89

7,6

66

4,4

18

5,6

75

6,9

88

8,2

06

4,3

48

6,5

12

3,5

32

5

,328

5,0

58

6,4

77

10,1

02

Sources:SCensusBureau,ProfleoGe

neralPopulationandHousingCharacteristics:2010,2011.

SSA,California,CongressionalStatistics,December2010,2011.

SSA,Table5.J5.1Numberbystateoro

therareaandsex,December2010,AnnualS

tatisticalSupplement,2011,February2012.

* T h e a n n u a l b e n e t s f o r t h e C o n g r e s s i o n a

l d i s t r i c t s w e r e c a l c u l a t e d b y t a k i n g t h e m o n t h

l y b e n e t s a n d m u l t i p l y i n g b y 1 2 T h e s t a t e a n

n u a l b e n e t s n u m b e r i s t h e s u m o f t h e c o n g r e s s i o n a l d i s t r i c t n u m b e r s a n d i s n o t

SocialSecuriTyBeNeficiarieSBycaTegory


17/25


pp

enix1:SocialSecurityWorksforaliforniasongressionaldistricts(Page2/3)

State

total

CongreSSionalDiSt

riCtS

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

Totalannual

benets

($in

millions)*

$64,2

82M

$1,5

27M

$

717M

$1,1

93M

$1,5

57M

$1,2

95M

$1,4

95M

$1,1

54M

$1,3

31M

$1,0

78M

$836M

$1,0

31M

$1,5

40M

$514M

$849M

$8

47M

$647M

$789M

$1,1

94M

Numberof

residents

instate/

congressional

district

37,2

53,9

56

757,3

37

744,3

50

784,1

76

797,0

84

695,4

04

681,622

844,3

20

691,4

52

684,4

96

660,1

94

642,1

38

662,3

19

611,3

36

642,2

36

637,1

22

654,3

03

662,4

13

659,3

85

Numberof

residents

receiving

Social

Securit

benets

4,9

79,1

41

119,9

00

7

1,8

02

102,1

32

123,4

47

102,2

45

107,4

39

92,2

56

96,0

62

82,0

38

66,0

06

81,6

10

100,1

93

51,1

89

74,9

50

72,6

64

61,6

94

68,0

57

84,9

53

Percentof

residents

receiving

Social

Securit

benets

13.4

%

15.8

%

9.6

%

13.0

%

15.5

%

14.7

%

15.8

%

10.9

%

13.9

%

12.0

%

10.0

%

12.7

%

15.1

%

8.4

%

11.7

%

11.4

%

9.4

%

10.3

%

12.9

%

Women

2,5

20,5

06

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Retired

workers

3,3

01,0

43

78,1

35

4

0,2

57

64,5

09

75,9

62

68,1

63

75,3

35

55,6

91

67,7

63

55,0

38

43,5

00

57,7

18

73,9

98

33,9

13

47,9

42

48,5

14

37,3

52

42,6

12

60,6

11

Disabled

workers

662,2

32

16,8

17

1

3,3

27

14,8

82

20,4

53

13,6

26

11,4

99

15,0

91

9,3

37

10,3

96

8,8

19

8,3

78

8,0

55

7,0

95

8,9

49

10,3

49

9,2

69

10,9

53

8,3

13

Widow(er)s

382,1

38

9,2

50

6,0

03

8,1

89

9,8

79

7,7

48

8,3

20

7,0

15

7,5

54

5,9

38

4,8

33

5,8

42

7,6

03

3,2

95

6,0

56

4

,964

5,1

14

5,0

14

6,5

90

Spouses

269,3

63

5,8

32

3,9

19

5,2

14

5,8

90

5,6

02

5,7

59

4,3

57

5,4

70

4,7

21

4,2

56

4,9

67

6,4

36

3,3

47

5,5

62

3

,095

4,6

55

3,0

03

4,5

87

Children

364,3

65

9,8

66

8,2

96

9,3

38

11,2

63

7,1

06

6,5

26

10,1

02

5,9

38

5,9

45

4,5

98

4,7

05

4,1

01

3,5

39

6,4

41

5

,742

5,3

04

6,4

75

4,8

52

Sources:SCensusBureau,ProfleoGe

neralPopulationandHousingCharacteristics:2010,2011.

SSA,California,CongressionalStatistics,December2010,2011.

SSA,Table5.J5.1Numberbystateoro

therareaandsex,December2010,AnnualS

tatisticalSupplement,2011,February2012.

* T h e a n n u a l b e n e t s f o r t h e C o n g r e s s i o n a

l d i s t r i c t s w e r e c a l c u l a t e d b y t a k i n g t h e m o n t h

l y b e n e t s a n d m u l t i p l y i n g b y 1 2 T h e s t a t e a n

n u a l b e n e t s n u m b e r i s t h e s u m o f t h e c o n g r e s s i o n a l d i s t r i c t n u m b e r s a n d i s n o t



18/25


ppenix1:SocialSecurityWo

rksforaliforniasongres

sionaldistricts(Page3/3)

State

total

CongreSSionalDiStriCtS

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

Totalannual

benets

($inmillions)*

$64,2

82M

$808M

$909M

$882M

$1,1

70M

$1,6

51M

$1,1

78M

$756M

$1,1

85M

$1,9

78M

$1,5

49M

$581M

$1,5

04M

$1,4

15M

$1,4

33M

$1,0

82M

$1,3

05M

$950M

Numberof

residentsin

state/

congressional

district

37,2

53,9

56

648,8

47

641,4

10

643,1

15

665,6

53

797,1

33

667,6

38

735,5

81

844,7

56

914,2

09

64

8,6

63

631,4

22

727,8

33

797,4

28

753,1

35

757,8

91

673,8

93

662,8

54

Numberof

residents

receivingSocial

Securitbenets

4,9

79,1

41

70,2

97

77,5

75

71,7

41

84,8

47

131,0

10

82,7

83

69,2

73

90,7

91

149,7

88

10

6,8

73

51,9

80

99,8

40

108,8

10

103,0

68

103,0

87

98,6

60

75,4

60

Percentof

residents

receivingSocial

Securitbenets

13.4

%

10.8

%

12.1

%

11.2

%

12.7

%

16.4

%

12.4

%

9.4

%

10.7

%

16.4

%

16.5

%

8.2

%

13.7

%

13.6

%

13.7

%

13.6

%

14.6

%

11.4

%

Women

2,5

20,5

06

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Retired

workers

3,3

01,0

43

41,8

96

49,1

57

46,2

54

59,5

87

85,0

10

59,2

30

36,8

62

58,7

14

104,6

90

78,1

76

31,7

48

74,4

81

75,0

43

74,3

26

63,0

06

66,3

60

48,9

73

Disabled

workers

662,2

32

12,5

57

9,6

76

8,9

50

8,3

46

18,9

31

7,3

49

12,4

11

11,7

44

17,2

95

8

,603

7,5

78

6,6

33

12,2

69

8,9

17

13,1

60

11,8

77

11,7

73

Widow(er)s

382,1

38

5,5

13

6,6

01

5,9

58

6,7

24

10,1

13

6,2

89

5,9

78

7,3

54

10,6

23

8

,107

3,9

88

8,1

66

8,3

74

8,3

94

10,1

92

8,0

35

6,4

62

Spouses

269,3

63

3,5

05

5,9

18

4,9

37

5,2

37

6,1

98

4,8

82

4,2

97

5,0

48

7,1

25

6

,597

4,0

18

6,2

10

5,8

39

6,2

08

8,4

74

5,1

14

3,9

03

Children

364,3

65

6,8

26

6,2

23

5,6

42

4,9

53

10,7

58

5,0

33

9,7

25

7,9

31

10,0

55

5

,390

4,6

48

4,3

50

7,2

85

5,2

23

8,2

55

7,2

74

4,3

49

Sources:SCensusBureau,ProfleoG

eneralPopulationandHousingCharacteristics

:2010,2011.

SSA,California,CongressionalStatistic

s,December2010,2011.

SSA,Table5.J5.1Numberbystateor

otherareaandsex,December2010,AnnualStatisticalSupplement,2011,February2012.

*TheannualbenetsfortheCongression

aldistrictswerecalculatedbytakingthemonthlybenetsandmultiplyingby12.Thestateannualbenetsnumberisthesumofthecongressionaldistrictnumbersandis

notnecessarilyconsistentwithstatetota

lscitedelsewhereinthereport.



19/25


20/25
http://bea.gov/regional/reis/


21/25


Endnotes

1 Complete citations for the sources of the numbers included in Figure 1 can be found where the numbers appear elsewhere in the report. All of thestatistical data used in Figure 1, as well as the rest of the report, are the most current data available. Some data were available in more recent years thanothers. For sets of data partially available for one year and partially available for another, the most recent common year was chosen. As a result, nearlyall numbers relating to Social Security date to 2010, nearly all numbers relating to Medicare date to 2009, and nearly all numbers relating to Medicaiddate to FY2009. When data from other years are used, the report says so explicitly.2 While Social Security and Medicare benefits are funded entirely by the federal government, Medicaid is partially funded by state governments, andsometimes local governments.3 There were 56 million beneficiaries nationwide as of May 2012. Except where otherwise noted, the rest of the Social Security data referenced in thisreport date to 2010, the most recent common year in which those data were available. Total Social Security beneficiaries in individual states dating to2010 will not add up to this figure. Social Security Administration (SSA), Table 2. Social Security Benefits, May 2012, Monthly Statistical Snapshot,May 2012, June 2012. http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/#table24 Average annual benefit amounts calculated by dividing total annual benefits by total beneficiaries. Total annual benefits from SSA, Table 5.J1Estimated total annual benefits paid, by state or other area and program, 2010 (in millions of dollars), Annual Statistical Supplement, 2011 [herein,

Ann. Stat. Supp.],February 2012. http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2 Total beneficiaries from SSA,Table 5.J2 Number, by state or other area, program, and type of benefit, December 2010,Ann. Stat Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j15 Households refers to aged units, which are married couples living together of whom at least one is aged 65 or older, or unmarried persons aged 65or older. SSA, Table 9.A1, Income of the Population, 55 or Older, 2010, August 2012.http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a16 Center on Budget & Policy Priorities (CBPP), Social Security Keeps 20 Million Americans Out of Poverty, A State-by-State Analysis, August, 2010.http://www.cbpp.org/files/8-11-10socsec.pdf7 Social Security Trustees,2012 Annual Trustees Report, April 25, 2012, p. 11. http://www.ssa.gov/oact/tr/2012/tr2012.pdf8 CBPP, What the 2012 Trustees Report Shows About Social Security, Figure 1, May 10, 2012.http://www.cbpp.org/cms/index.cfm?fa=view&id=37749 White House, Office of Management and Budget, Table 1.1 Summary of Receipts, Outlays and Surpluses or Deficits: 1789-2017, 2012.http://www.whitehouse.gov/omb/budget/Historicals10 Social Security does not contribute to the deficit, because benefits can only be paid from revenue collected by the Social Security trust fundstheOld-Age and Survivors Insurance (OASI) trust fund and Disability Insurance (DI) trust fundwhich are completely separate from the general budget.Social Security Trustees, Table II.B1,2012 Annual Trustees Report, April 25, 2012, p. 6. http://www.ssa.gov/oact/tr/2012/tr2012.pdf In 2010 and 2011The General Fund transferred money to the Social Security trust funds in order to replace revenue lost due to a temporary two-percentage-point payrolltax reduction. The payroll tax cut, and the General Fund transfer that resulted, was a temporary stimulus measure that will expire at the end of the year.It never fundamentally changed Social Securitys self-sustaining funding structure.

The trust funds do not have borrowing authority, and therefore, cannot deficit-spend. In the event that trust fund revenues fall short of what isneeded to pay 100 percent of benefits, then, by law, benefits could not be paid in full and on time. That is why, if Congress does nothing to shore upthe programs finances by 2033, Social Security will only have sufficient revenue to pay about three-quarters of scheduled benefits through 2086. SocialSecurity Trustees, Table II.B1,2012 Annual Trustees Report,April 25, 2012, p. 11. http://www.ssa.gov/oact/tr/2012/tr2012.pdf This modest fundingshortfall is often cited as evidence that the program is financially unsustainable, or in deficit. In fact, it is just the opposite: it attests to Social Securitysself-sustaining funding structure that bars it from deficit-spending or borrowing from the general budget in any way.11

Total beneficiaries from SSA, Table 5.J2 Number, by state or other area, program, and type of benefit, December 2010,Ann. Stat. Supp.,February 2012. http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2 State population data from .S. Census Bureau,Profile of General Population and Housing Characteristics: 2010,2010 Demographic Profile Data, 2011.http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=table12 Total annual benefits from SSA, Table 5.J1 Estimated total annual benefits paid, by state or other area and program, 2010 (in millions ofdollars),Ann. Stat. Supp., February 2012. http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1 Benefits equivalentpercentage of Gross Domestic Product (GDP) calculated using state GDP figures from Bureau of Economic Analysis, Gross Domestic Product by State(millions of current dollars), September 29, 2011. http://bea.gov/iTable/iTable.cfm?ReqID=70&step=1&isuri=1&acrdn=113 Average benefit found by dividing total spending by total beneficiaries. Total annual benefits from Social Security Administration (SSA), Table 5.J1Estimated total annual benefits paid, by state or other area and program, 2010 (in millions of dollars), Ann. Stat. Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1 Total beneficiaries from SSA, Table 5.J2 Number, by state orother area, program, and type of benefit, December 2010,Ann. Stat. Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j214 CBPP, Social Security Keeps 20 Million Americans Out of Poverty, A State-by-State Analysis, August, 2010. http://www.cbpp.org/files/8-11-10socsec.pdf Total number of state residents lifted out of poverty, which does not appear in CBPPs report, was made available to Social SecurityWorks by the reports authors, Arloc Sherman and Paul N. Van de Water. The state-level data reflect an average from 2006-2008, and therefore do not

add up to the national totals, which date to 2008.15 For the purposes of this analysis, seniors describes individuals aged 65 or older. Herein, all references to seniors will reflect this definition.16 SSA, Table 5.J2Number, by state or other area, program and type of benefit, December 2010, Ann. Stat. Supp., February 2012. http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2 17 For the purposes of this analysis, typical is used to describe the median benefit. Herein, all references to typical will reflect this description.Monthly median benefit multiplied by 12 to calculate annual figure. SSA, Table 5.J6Percentage distribution of monthly benefit for retired workers, bystate or other area and monthly benefit, December 2010,Ann. Stat. Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j618 SSA, Table 5.J2Number, by state or other area, program, and type of benefit, December 2010, Ann. Stat. Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j219 CBPP, Social Security Keeps 20 Million Americans Out of Poverty, A State-by-State Analysis, August, 2010. http://www.cbpp.org/files/8-11-10socsec.pdfThe state-level data reflect an average from 2006-2008, and therefore do not add up to the national totals, which date to 2008.
http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/#table2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a1http://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.ssa.gov/oact/tr/2012/tr2012.pdfhttp://www.cbpp.org/cms/index.cfm?fa=view&id=3774http://www.whitehouse.gov/omb/budget/Historicalshttp://www.ssa.gov/oact/tr/2012/tr2012.pdf%20In%202010%20and%202011http://www.ssa.gov/oact/tr/2012/tr2012.pdfhttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=tablehttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1http://bea.gov/iTable/iTable.cfm?ReqID=70&step=1&isuri=1&acrdn=1http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j6http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j6http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1http://bea.gov/iTable/iTable.cfm?ReqID=70&step=1&isuri=1&acrdn=1http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=tablehttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/oact/tr/2012/tr2012.pdfhttp://www.ssa.gov/oact/tr/2012/tr2012.pdf%20In%202010%20and%202011http://www.whitehouse.gov/omb/budget/Historicalshttp://www.cbpp.org/cms/index.cfm?fa=view&id=3774http://www.ssa.gov/oact/tr/2012/tr2012.pdfhttp://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a1http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/#table2


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20 CBPP, Social Security Keeps 20 Million Americans Out of Poverty, A State-by-State Analysis,August, 2010. http://www.cbpp.org/files/8-11-10socsec.pdfThe state-level data reflect an average from 2006-2008, and therefore do not add up to the national totals, which date to 2008.21 SSA, Table 5.J5.1Number, by state or other area, race, and sex, December 2010,Ann. Stat. Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j5.1 Percentage of women receiving benefits calculated using totalfemale population from .S. Census Bureau, Age groups and Sex: 2010,2010 Census Summary File 2.http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_SF1_QTP1&prodType=table22 SSA, Table 5.J2Number, by state or other area, program, and type of benefit, December 2010, Ann. Stat. Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j223 CBPP, Ibid. The number and percentage of women aged 65 or older lifted out of poverty, which do not appear in CBPPs report, were made availableby the reports authors, Arloc Sherman and Paul N. Van de Water. The state-level data reflect an average from 2006-2008, and therefore do not add up

to the national totals, which date to 2008.24 CBPP, Ibid. The number and percentage of women aged 65 or older lifted out of poverty, which do not appear in CBPPs report, were made availableby the reports authors, Arloc Sherman and Paul N. Van de Water. The state-level data reflect an average from 2006-2008, and therefore do not add upto the national totals, which date to 2008.25 The number of Social Security disability beneficiaries cited here includes only those disabled workers receiving disability benefits. It does not includethose disabled workers and disabled adult children who receive Old-Age (retirement) and Survivors benefits. Herein, any use of the term disabledworker will refer only to those disabled workers receiving disability benefits.26 SSA, Table 5.J8Percentage distribution of disabled workers, by state or other area and monthly benefit, December 2010, Ann. Stat. Supp.,February 2012. http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j827 Monthly median benefit multiplied by 12 to calculate annual figure. SSA, Ibid.28 nless otherwise specified as children under 18 to the exclusion of all others, the term children used in this section is consistent with the SocialSecurity Administrations use of the term to include three groups: children under age 18; students aged 18-19, which refers to children ages 18 and19 who are matriculated in an institution of secondary education; and disabled adult children, which refers to those adults who have been disabledsince before they reached age 18.29 .S. Census Bureau, Age Groups and Sex: 2010,2010 Summary File 2, 2011.

http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_SF2_QTP1&prodType=table Data on percentage ofchildren insured from SSA, Survivors Benefits, 2011, p. 4. http://ssa.gov/pubs/10084.pdf30 SSA, Table 5.J10Number of children, by state or other area and type of benefit, December 2010, Ann. Stat. Supp., February 2012.http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j1031 Association of American Retired Persons (AARP), Grandfacts: State fact sheets for grandparents and other relatives raising children, 2011.http://www.aarp.org/relationships/friends-family/grandfacts-sheets/32 SSA, Table 5.J5.1Number, by state or other area, race, and sex, December 2009,Annual Statistical Supplement, 2010, 2010.http://www.ssa.gov/policy/docs/statcomps/supplement/2010/5j.html#table5.j5.1 African American population from .S. Census Bureau, SelectedPopulation Profile in the nited States,2007-2009 American Community Survey 3-Year Estimates.http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_09_3YR_S0201&prodType=table33 SSA, Table 9.A3, Income of the Population 55 or Older,2010, March 2012.http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a334 SSA, Table 5.A1Number and average monthly benefit, by type of benefit and race, December 2009,Annual Statistical Supplement, 2010,February 2011. http://www.ssa.gov/policy/docs/statcomps/supplement/2010/5a.html#table5.a135 The term households as it is used here refers to households reporting income in the past 12 months. Households receiving Social Security benefitsare those households listed as receiving Social Security income. .S. Census Bureau, Selected Population Profile, 2008-2010 American Community

Survey 3-Year Estimates.http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_S0201&prodType=table36 SSA, Table 9.A3, Income of the Population 55 or Older, 2010, March 2012.http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a337 SSA, Social Security is Important to Hispanics, January 2012. http://www.ssa.gov/pressoffice/factsheets/hispanics-alt.pdf38 The term households as it is used here refers to households reporting income in the past 12 months. Households receiving Social Securitybenefits are those households listed as receiving Social Security income. .S. Census Bureau, Selected Population Profile,2008-2010 AmericanCommunity Survey 3-Year Estimates, 2011. http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_

S0201&prodType=table39 SSA, Social Security is Important to American Indians and Alaska Natives, January 2012. http://www.ssa.gov/pressoffice/factsheets/amerindian-alt.pdf40 SSA, Social Security is Important to American Indians and Alaska Natives, January 2012. http://www.ssa.gov/pressoffice/factsheets/amerindian-alt.pdf41 The term households as it is used here refers to households reporting income in the past 12 months. Households receiving Social Securitybenefits are those households listed as receiving Social Security income. For states in which there are large numbers of Asian American residents aswell as Native Hawaiian and Pacific Islander residents, the numbers of beneficiaries and residents were added to calculate percentage of total Asian

American, Native Hawaiian and Pacific Islander residents receiving benefits. .S. Census Bureau, Selected Population Profile,2008-2010 AmericanCommunity Survey 3-Year Estimates, 2011. http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_

S0201&prodType=table42 SSA, Table 9.A3, Income of the Population 55 or Older, 2010, March 2012. http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a343 SSA, Social Security is Important to Asian Americans and Pacific Islanders, January 2012. http://www.ssa.gov/pressoffice/factsheets/asian-alt.pdf44 .S. Department of Agricultures Economic Research Service (ERS), designates counties as rural or urban based on population density, grading themon a scale of 1 to 9, with 1 being the most urban and 9 being the most rural. Counties are considered rural if they are designated 4 or higher. For thepurposes of this report, the authors used both the ERSs 9-point scale, and the binary abbreviation of these codes, which codes rural counties 0 andurban counties 1.45 County-level population data from .S. Census Bureau, Profile of General Population and Housing Characteristics: 2010,2010 Demographic ProfileData. http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=table Beneficiary datafrom SSA, Table 4. Number of beneficiaries in current payment status, by county, type of benefit, and sex of beneficiaries aged 65 or older, December2010, OASDI Beneficiaries by State and County, 2010, August 2011. http://www.ssa.gov/policy/docs/statcomps/oasdi_sc/index.html
http://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.cbpp.org/files/8-11-10socsec.pdfhttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j5.1http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_SF1_QTP1&prodType=tablehttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j2http://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j8http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_SF2_QTP1&prodType=tablehttp://ssa.gov/pubs/10084.pdfhttp://www.ssa.gov/policy/docs/statcomps/supplement/2011/5j.html#table5.j10http://www.aarp.org/relationships/friends-family/grandfacts-sheets/http://www.ssa.gov/policy/docs/statcomps/supplement/2010/5j.html#table5.j5.1http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_09_3YR_S0201&prodType=tablehttp://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a3http://www.ssa.gov/policy/docs/statcomps/supplement/2010/5a.html#table5.a1http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_S0201&prodType=tablehttp://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a3http://www.ssa.gov/pressoffice/factsheets/hispanics-alt.pdfhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_S0201&prodType=tablehttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_S0201&prodType=tablehttp://www.ssa.gov/pressoffice/factsheets/amerindian-alt.pdfhttp://www.ssa.gov/pressoffice/factsheets/amerindian-alt.pdfhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_S0201&prodType=tablehttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_10_3YR_S0201&prodType=tablehttp://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a3http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a3http://www.ssa.gov/pressoffice/factsheets/asian-alt.pdfhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=tablehttp://www.ssa.gov/policy/docs/statcomps/oasdi_sc/index.htmlhttp://www.ssa.gov/policy/docs/statcomps/oasdi_sc/index.htmlhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_DP_DPDP1&prodType=tablehttp://www.ssa.gov/pressoffice/factsheets/asian-alt.pdfhttp://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a3http://www.ssa.gov/policy/docs/statcomps/income_pop55/2010/sect09.html#table9.a3http://factfinder2.census.gov/faces/tableservices/jsf/pages/p

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